UPDATE 1-Sharp public offering falls short as fears of future weigh

* Concern over business prospects prompts investors to sell
shares before new issue

By Sophie Knight

TOKYO, Oct 7 Sharp Corp is set to raise
119 billion yen ($1.23 billion) in a public share offering, 20
percent less than targeted after concerns about competition for
its display and solar panel businesses drove down its shares
ahead of the issue.

The shortfall in funds could curb Sharp's efforts to turn
around its operations which, along with fellow Japanese consumer
electronics companies such as Panasonic Corp and
Toshiba Corp, have suffered from a slump in TV sales as
foreign rivals encroached on their market.

Sharp, in a filing to the stock exchange on Monday, said it
aims to raise a maximum 119 billion yen with a public issue of
450 million shares, below the 148.9 billion yen it indicated on
Sept. 18.

Its shares have fallen 21.4 percent since then, when the
company said it would sell the equivalent of 43 percent of
outstanding shares. A sale will dilute the value of outstanding
shares, giving investors a reason to sell.

Sharp priced its new shares at 279 yen each, 4.1 percent
lower than the price of its outstanding shares at the close of
trade on Monday, when it fell 8.2 percent to a six-month low.

Sharp on Monday also said it would sell 55 million shares -
up from 45 million shares due to the drop in its share price -
for 17.5 billion yen to Lixil Group Corp, Makita Corp
and Denso Corp via a third-party allotment,
taking the total amount of equity it will raise to 136.5 billion
yen.

"If you consider their restructuring plans this looks like a
compromise. They're going for more than 130 billion yen, which
is good for their finances. But the focus on their fundamentals
has sharpened and on whether they can turn a stable profit,"
said Advanced Research Japan senior analyst Masahiko Ishino.

The company said it would invest 50 billion yen of the
equity raised in its TV and display unit, where overseas sales
have been pinched by a strong yen and competition from rivals
such as Apple Inc and Samsung Electronics Co Ltd
.

Sharp posted a net loss of 545 billion yen ($5.61
billion)for the year ended March, leaving its capital below 6
percent of equity, which is well short of the 20 percent widely
regarded as a financially stable threshold for manufacturers.

Analysts say company may not be able to make it over 10
percent by the end of this year, even with this capital
injection.

However, stronger than expected sales of solar panels and
batteries in the first quarter prompted Sharp to narrow its net
loss projection to 10 billion yen from 20 billion for the six
months to September.

Last year, the company received a 360 billion yen bailout
from creditor banks and has since received investments from
Samsung Electronics Co Ltd and Qualcomm Inc
.

WASHINGTON, Dec 9 Aetna Inc's chief
executive denied on Friday that its withdrawal from some
Obamacare exchanges was in retaliation for government efforts to
halt its merger with Humana Inc, as he sought to
convince a federal judge to approve the deal.

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